Medicaid Expansion Divides Governors at Virginia Meeting

Governors from around the U.S. began
three days of meetings that include discussion of an issue
dividing them: whether to expand Medicaid to more low income
residents.

Two weeks after the U.S. Supreme Court gave states the
power to reject an element of President Barack Obama’s health-care overhaul that calls for expanding the joint state-federal
program to 17 million more Americans, the majority of governors
have yet to commit.

As the National Governors Association opened meetings today
in Williamsburg, Virginia, the state leaders are comparing their
plans and debating the economic costs and benefits of an
expansion. Republican governors in at least six states say they
will reject federal money to provide coverage to more residents,
and governors in at least 25 other states said they’re still
considering how to proceed.

Virginia Governor Robert McDonnell, head of the Republican
Governors Association, said the program may cost the state too
much unless it is overhauled. McDonnell said is still
considering whether to go along with the plan.

“I don’t think it’s good for my state without reform,” he
told reporters today.

At their meeting, governors also are discussing ways to
create jobs and encourage economic development.

The Supreme Court decision put governors in the center of
an election-year battle over the health-care overhaul, Obama’s
signature domestic achievement.

Partisan Divide

Republican and Democratic governors speaking to reporters
today described a partisan divide in whether to adopt the
program. Republican presidential candidate Mitt Romney has said
he seeks to overturn the Patient Protection and Affordable Care
Act if he defeats Obama in November election.

“If we don’t get health-care spending under control in
this country it will destroy jobs,” said Democrat Peter Shumlin, the governor of Vermont, at a news conference. “We
will not be able to compete with countries who are currently
stealing our jobs.”

Republicans have led the opposition to expanding Medicaid.
Texas Governor Rick Perry and Florida’s Rick Scott both said
they won’t expand Medicaid.

Obama’s plan will allow states to open Medicaid programs to
those earning as much as 133 percent of the poverty line.

If states don’t expand the program, millions who now lack
health insurance would still be uncovered when the law kicks a
year and a half from now, without either access to Medicaid or
able to receive subsidies that will help those with higher
incomes buy health insurance.

New Jeopardy

The federal government will pay the full cost of those
newly eligible for Medicaid until 2017, when its share will
begin to be phased down to 90 percent. With medical costs
consuming a growing share of state budgets, some state leaders
say they are still weighing the potential risks of adding to the
program.

The federal government will pay $931 billion of the costs
through 2022 and states will pay $73 billion, according to the
Center on Budget and Policy Priorities, a Washington-based
research organization that advocates policies that assist the
poor.

Hospitals, especially those that treat many poor people,
have warned that failing to expand Medicaid could put them in
financial jeopardy. Managed-care companies that focus on
Medicaid, including Virginia Beach, Virginia-based Amerigroup
Corp. and Saint Louis, Missouri-based Centene Corp. (CNC), won’t see
as many customers as they had expected if governors opt out of
the expansion.

Hunting Pennies

Maryland Governor Martin O’Malley, a Democrat, said
expanding Medicaid will save the state money and benefit
businesses that are being increasingly squeezed by rising health
insurance bills for their workers.

“Instead of throwing money away on ever-more expensive
health care, we’re looking forward to being an early implementer
so that our businesses can invest in their businesses, help new
markets and invest in creating new jobs,” he said.

Not all Democrats are supporting Medicaid expansion.
Colorado Governor John Hickenlooper, a Democrat, said he’s still
waiting for a financial analysis.

“We haven’t been able to document the savings yet,” he
said at a news conference. “This process will take a couple
months.”

Nebraska Governor Dave Heineman, the chairman of the
National Governors Association, said the issue is at the “top
of governors’ minds.” Governors are seeking more information
about the program from the Obama administration, he said.

“Ultimately, there are going to be 50 state solutions,”
Heineman told reporters.